A Conversation with Barbara Ehrenreich

NOW's David Brancaccio hosts a special conversation with Barbara Ehrenreich on the state of American workers and wages today.

The following program was recorded at the studio of NOW on August 28, 2006.

David Brancaccio: Welcome to POV's special series of Web conversations surrounding the film Waging a Living. I'm David Brancaccio. Waging a Living chronicles the day-to-day battles of four low-wage earners fighting to lift their families out of poverty. Listen to this statistic: more than 30 million Americans, that's one in four workers, are stuck in jobs that do not pay the basics for a decent life. Today I'm talking with Barbara Ehrenreich, the author of two of the great books on this subject: Nickel and Dimed: On Not Getting By In America and Bait And Switch: The Futile Pursuit Of The American Dream. We're going to talk about the plight of low-wage workers in America. Hello, Barbara.

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Barbara Ehrenreich: Hi, good to be with you, David.

David Brancaccio: And also the director and the producer of the POV film, Waging a Living, Roger Weisberg. How are you doing?

Roger Weisberg: Good. Good to be with you.

Brancaccio: Roger just has a few minutes with us because he has a previous engagement, but I want to bring him into this conversation. Barbara first: when you watch this film, there's a phrase that leaps out, I thought it would resonate with you. It is simply this. A person says, "I am hustling backwards."

Barbara Ehrenreich is the author of Bait and Switch: The (Futile) Pursuit of the American Dream and Nickel and Dimed: On (Not) Getting By in America, published by Metropolitan Books. She maintains a blog at www.nickelanddimed.net.

Ehrenreich: Yes. Roger can explain her situation. Here's somebody who actually got an increase in pay, but it was enough to end her access to what limited government benefits she was getting, like Medicaid, right, Roger?

Weisberg: Yes. She lost Medicaid, she lost food stamps, she lost childcare assistance for her kids and she saw her subsidized Section 8 housing go way up in price, so she actually lost $600 worth of government benefits when she got a $400 increase in wages.

Brancaccio: It's amazing when you actually look at government statistics. In fact, you don't even have to consult liberal sources to hear about income inequality. Not too long ago, earlier in the summer, no less than Hank Paulson, the U.S. Treasury Secretary, former head of Goldman Sachs, copped to this notion of growing income inequality. He started talking around the edges of it, but he suggested that yes, it's a problem. But, Roger, I want to understand, you've devoted a lot of your work toward addressing this. I'm not talking about people sitting around in their tuckases. We're talking about people who are knocking themselves out and not moving forward.

David Brancaccio hosted Minnesota Public Radio's Marketplace for thirteen years before joining and co-hosting NOW with Bill Moyers in 2003. Brancaccio took over as host for the departing Bill Moyers in January, 2005. He is the author of Squandering Aimlessly: On the Road with the Host of Public Radio's "Marketplace."

Weisberg: These are folks that are working every bit as hard and most likely harder than you and I, often working more than one job, and they simply can't earn a wage that is sufficient to support their families and pull them out of poverty. And this problem of income inequality has been exacerbated in recent years. One of the reviewers of our film said it is a cliché to say that the rich are getting richer and the poor are getting poorer, but it remains one of the galling truths of our time. As far as I'm concerned, it's going to undermine the social fabric of this country if it continues to escalate.

Brancaccio: Barbara, you've actually been there famously as part of your journalism technique. You've put yourself in these positions of trying to subsist on some of these jobs. It is near impossible, right, at some of these wage levels to move forward in your life?

Ehrenreich: In 2000 I wrapped up a journalistic experiment which was to see if I could support myself on the wages I could earn just going out there to the kind of jobs that are considered "unskilled." So I worked as a waitress, a hotel housekeeper, a maid with a house cleaning service, a nursing home maid, a Wal-Mart associate; I averaged some $7.00 an hour, and I could not make ends meet on that. The problem for me was rent, which was overwhelming, and that's the problem that the people in your film, Roger, also face. Housing costs are now completely out of line from earnings and wages. Not to mention other costs like medical care costs, which people in your film have also experienced hardships with.

Brancaccio: But you have this irony, because one of the things that has supposedly been driving the U.S. economy forward has been the rising housing prices. It has really fueled some of the statistics forward in this. But the other, if it costs a fortune to buy a house, it trickles down and this puts people who are working full-time jobs sometimes in the position of becoming homeless.

Weisberg: That's right, one of the women in our film, Jean Reynolds, decided that it was more important to pay the medical bills for her terminally ill daughter than rent, and before she knew it she was being evicted and facing homelessness with her young children.

Brancaccio: There may be some people who are listening to this on their digital music players who say, "Well, I am very concerned about this, this is not the state of affairs that we want in America. It's not about me, I have a college education, this protects me." Barbara, what's your experience about someone who is — on paper — firmly in the middle class? Are we immune from this kind of life?

Ehrenreich: That was the promise of a college education: you get your degree, work hard, get some kind of a white collar job, eventually you might get promoted, and retire with a pension. We all know that's not true anymore. People bounce around. Elaine Chao, our Secretary of Labor, recently confessed that you could expect nine jobs in the course of your career after college — if you went to college, that is.

What's happening is what some economists call income volatility in the middle class, which means people getting battered by layoffs, outsourcing, downsizing. People could be making $100,000 a year and living in a big house on the block, but one day they're suddenly gone, they're not there anymore, because they got laid off, they went through their savings — and even upper-middle class people don't have much savings anymore — and they can very easily end up in exactly the kind of situation as the people profiled in Roger's movie, "Waging a Living." That is, they could be working for $8 or $10 an hour at Circuit City or Wal-Mart or somewhere like that.

Brancaccio: Underemployment is one term for that. We don't measure that that well, do we?

Ehrenreich: I have various estimates that somewhere around 17 percent of the workforce could be people in jobs that are inappropriate to their education. For example, with their education some people expected a white-collar office job where they sit at a desk. In fact, they might be cleaning floors or just stocking the shelves in a big-box store.

Brancaccio: On this issue of income inequality, one way to put it is that what you made this year is not really a great predictor anymore of what you might make next year. It really unites working-class people and middle-class people. We did some reporting on our program NOW in which we met this wonderful man whose name is John, he lives in Kentucky. He was a corporate lawyer, he went to law school, he was making six figures. He loses that job through no fault of his own as the company went bankrupt, and then an illness and a bunch of things start to spiral, and then the next year, after making six figures previously he's not making much money at all. But then it comes together, he finds another corporate job, only that company goes out of business. Again, his income falls. This is something that we do see often: there's actual statistics at the University of Michigan which show that in the last 30 years those swings in income are really much more pronounced.

Ehrenreich: Louis Uchitelle, the New York Times economics reporter, has a book out called The Disposable American on just this kind of theme.

NOW host David Brancaccio and Waging a Living filmmaker Roger Weisberg in the studio. Photo by Wendy Stulberg.

Brancaccio: I want to talk more about that with you, Barbara. We actually have to say goodbye to Roger Weisberg, who has a previous commitment. We want to thank you for sitting in for us for a little while and we look forward to seeing your film on POV.

Weisberg: Thanks a million, great being with you.

Brancaccio: Let's talk about the book by Louis Uchitelle of the New York Times.

Ehrenreich: Louis had a book come out last spring called The Disposable American which looks at wave after wave of layoffs and how they are affecting both blue- and white-collar workers. But I don't think there's enough attention paid to the displaced white-collar people, just like I don't think there's enough attention to the working poor. It's easy to paper over it and not really look at these issues.

Brancaccio: In the New York Times recently there was an article about these men who've just given up on the workforce. They don't want to, in their view, slum by taking a position that is not commensurate to their experience and education, and so they are drawing on the family savings. A number of people called this article to my attention and said, "look at these lazy people," or "why don't they just get on the stick here and not be a drag on their family's future?" But there's another way to read this, which is the symptom of a larger problem.

Ehrenreich: Yes, I can't blame those guys portrayed in that article. By the way, Louis Uchitelle was one of the authors of that article. I can't blame them because you get cynical after a while. If you have worked hard and not made enough money all your life, that would make you cynical, because the whole social contract, as Roger put it, was around the promise that if you work hard you'll get ahead. Or if you have followed the rules — that is, having gone to college, having had the white-collar job, conformed to the corporate microculture you're in, did all those things — and then got slapped down again and again in layoffs, you can get cynical and say, "Well, maybe I'm going to hang out. We're going to live on much less, on whatever my wife is earning. Maybe I'll do some handyman jobs around town, but I'm not going to be part of that anymore."

Brancaccio: It's interesting that raising the minimum wage, which is on the tips of the tongues of many Democrats these days, is not going to get at that problem. For example, a corporate lawyer who loses his job — a rising minimum wage is not going to solve his problem.

Ehrenreich: No, unless he bounces down to the $7 an hour level, which will be affected by an increase in the minimum wage. That's going to buoy people up who are making above the minimum wage now, so it helps provide a safety net for the middle-class person who might get bounced around. But no, a rise in minimum wage is not directly affecting that.

We also don't have adequate unemployment insurance, because it doesn't last very long. Certainly compared to European countries, where you get some money from unemployment insurance for years, possibly, and you have health insurance. That is a big catch for the middle-class family that loses a job and gets bumped out of their middle-class situation. We have our health insurance, weirdly enough, attached to our jobs, although our jobs are not attached to us. It is the most outmoded kind of thing. So that is a major part of the crisis for a lot of people as they've had an outsourcing or a downsizing.

Brancaccio: Lose a job and you can COBRA your healthcare coverage, if you could afford it, for what is it, 18 months?

Ehrenreich: COBRA is very expensive, if you've ever tried that.

Brancaccio: Yes, it can be hundreds and hundreds of dollars a month. And so for many people it just means that effectively they're without real healthcare. Suddenly, if there's a chronic illness, if something happens to you, it can be a further devastation. But I want to get back to this notion of the minimum wage. It's certainly a front and center agenda item as we're gearing up for this campaign. How much will that help if there's an incremental increase in the minimum wage amount?

Ehrenreich: There have been 19 states who have not waited on the federal government; they've gone ahead and raised their minimum wages, so it is already happening. The question is, when will Congress be able to enact a real minimum wage boost. They tried a few weeks ago, but it was so cynical, because they attached this rather small increase in the minimum wage to a major decrease in the estate tax. In other words, we can't give any little thing to the poor without giving much more to the very, very wealthy. So the Democrats shot that down.

Now, are we going to have a sincere attempt to raise the minimum wage nationally? I'm wondering about that. It's a movement, though, and this is what's interesting to me. Five years ago, it was very different, there wasn't so much attention to this issue. Now it's taken on the proportions of a crusade. Over 130 cities have passed living wage ordinances, changing what employers who contract with that city have to pay. That's coming from coalitions of church groups, labor unions, community groups and students. In fact, one of the hottest issues on campus in the last year was a living wage for campus workers. For example, at the University of Miami, janitors struck. Janitors who being paid $6 and change an hour fasted to get union recognition. It was really heroic, but also kind of unhealthy, and students joined in. This has taken on the dimensions of a moral crusade. So I think that's something politicians can't ignore anymore.

Brancaccio: What would you attach to that call for a living wage? It can't just be an increase here or there of a few dollars an hour. Would you say healthcare?

Ehrenreich: Yes. How much can you keep raising that wage? Employers are going to say, "Oh, no, I couldn't do that," because a real living wage would have to be in the neighborhood of $15 or $16 an hour, as a national average. Employers are going to throw up their hands and say, "No way." So I'd say to them, "Okay, you can't do that. Let's talk about how are you going to get involved in the fight for universal health insurance, which would take a huge burden off the employer. What are you going to do to increase the possibility of subsidized housing, subsidized childcare, things they do in other countries that make it possible for people on somewhat lower wages to live."

Brancaccio: The POV film "Waging a Living" prompted our discussion here. In the film, there's an interesting moment, but it raises an awkward question that I just wanted to bounce off of you, Barbara. There's a wonderful woman, Mary, who is struggling, but she is very, very focused. She has a teenage daughter who comes across as really full of admiration for her mom, because the mom is able to live independently through her hard work. She's just barely managing it, but she's able to pull it together. She's a single mom, and as the narrative progresses Mary the mom hooks up with Julio, this nice-seeming guy. Some viewers could be left with the idea that the way to get out of this trap is that you've got to have a partner one way or another, and if there's any feminists listening, they may have a problem with that premise. But is that the problem here, that single people trying to run a family can't make it because the economy is now set up so that you've got to have two people working if you're going to get ahead?

David Brancaccio and Barbara Ehrenreich talk about the plight of low-wage workers in America. Photo by Wendy Stulberg.

Ehrenreich: I think it's true because wages are so low. What I discovered when I was working on Nickel and Dimed is that yes, I should find a husband or at least a roommate. The more wage-earning adults you have putting money toward the rent, the better off you are; that's simple arithmetic. This may be connected to the fact that the Bush administration's number one poverty initiative has been to encourage marriage, as if getting women married would solve the problem. Now, I don't think they're coming from a totally economic calculation, I think there's a lot of pro-family ideas going into that too. One of the problems with that — other than the fact that not every woman wants to be married — is that men don't make a lot of money. One of the demographics in this country that has really taken a hit in the last couple of decades is blue-collar men, and those are the guys you're looking at if you're a woman making $7 or $8 an hour. So I once asked myself a question: how many blue-collar men do you have to marry to lift you out of poverty? And the number is over two, I'd have to say.

Brancaccio: That's complicated to someone who is trying to promote traditional marriage.

Ehrenreich: It's complicated, not to mention who controls the remote in those families. No, it is kind of shortsighted.

Brancaccio: It gets employers off the hook who are paying very low wages, who are not often providing particularly generous healthcare packages, if they could say, "Well, but their family income is actually higher and therefore we don't have to put the wages a little bit higher." It's an easy out of that discussion if you tell people to just get married.

Ehrenreich: This is why women were paid less than men legally for so many years, decades, centuries, whatever. You were supposed to have a husband taking care of you if you were a woman. So I thought we got beyond that and got to the point of recognizing that even within a married couple now, women are very likely to be the major earner. Something like a third of married women are in fact the major earners in their family. And the other two thirds are significant contributors. So I hope we would move beyond that.

Not all men, I hate to say it, are marriage material. One reason for a fall off in marriage rates among low-income women is: why marry a guy who's not making much money? You're taking on another burden. Maybe he's on and off of jobs, or he's seasonally employed. That's not a great bargain. He's not a bargain like the men of an earlier generation who were autoworkers or steelworkers or miners, who had stable, relatively high paying union jobs. Now those were guys to go after. But in an economy based on service and retail, blue-collar men have really lost a lot of value.

Brancaccio: Well, gee, Barbara, that would be a way to increase marriage rates in America: encourage unionization!

Ehrenreich: Now, hey! That's right. Or we could draft single CEOs to marry very poor women.

Brancaccio: It would be an eye-opening experience, not unlike some of the things you've experienced through your journalism, seeing how people actually try to put it together.

Ehrenreich: Yeah, it could be a reality show, too! [Laughter]

Barbara Ehrenreich during the recording session for this special POV podcast. Photo by Wendy Stulberg.

So we have added, to the low-wage equation, the challenge of paying for healthcare. Then you have something that aids people in tough situations, but also can be a curse, frankly, and that is credit and debt. Easier credit has been a feature of the last 30 years in America. A lot of people can get so-called revolving credit, credit cards, but then it mounts up and becomes a burden. You have seen the effects of this first hand.

Ehrenreich: I remember a young woman I worked with, 19 years old at the time, and we worked together in the house cleaning service. She was quite ambitious, she hoped to get to community college or do more than being a housecleaner. There is, by the way, absolutely no career ladder if you're a maid or if you're a hotel housekeeper. There's nowhere to go. But this poor young woman had an $8,000 credit card debt at age 19. I didn't want to say it to her, but she was sunk. You're not going to get past that. Especially since the bankruptcy law got so mean a year ago, it is much harder to wipe the slate clean and start again. So, yes, we have a lot of young people, college educated too, maybe even more so, who are starting life with this ball and chain of debt around their ankle.

Brancaccio: Notwithstanding your observation that this idea of the living wage is getting legs and really becoming, in your view, a real movement, if so many Americans find themselves struggling, why is it not a revolutionary, bigger political issue? Why isn't dealing with this issue something that is on every politician's lips? Why isn't every person feeling like they're going backwards, not forwards, running around with a flaming torch and a pipe demanding change? You don't really see that.

Ehrenreich: I don't encourage the flaming torch and pipe. But I think it's got to be happening. Look at the fact that the Democrats are becoming more economically populous. That they are, as the New York Times put it recently, running against Wal-Mart for the congressional elections, and Wal-Mart isn't even on the ballot. In other words, they are recognizing the centrality of these issues. Wal-Mart is a stand-in for all the underpaying employers in America. Gore in 2000 didn't touch these sorts of issues. Kerry touched on them a little, he talked about raising the minimum wage, but it wasn't central to what he said. But I don't think it's something they can turn away from anymore. And if they are pulled in one direction, those Democrats, by their very wealthy donors, they are being pulled in another by hearing from constituents who are finding even with good pay, with gas prices, housing prices, health insurance, it's not working out.

Brancaccio: Still, there's an odd trait of the American character — I've noticed it in my reporting, you've seen it, I've seen it in your books — Americans tend to blame not the system, not the government or policy, but often themselves for their situation. There is a quote in "Waging a Living": "God is neglecting me." That a higher power is at work, perhaps for the person's own moral failing, is the idea. Sometimes there's a reluctance to connect what is happening to people with anything besides just bad luck or some sort of moral failing.

Ehrenreich: Yes, and I could sort of see that when I was working on Bait and Switch, where I was undercover as white-collar job seeker. In all these settings for white-collar job seekers, you go to a career coach and a networking environment and all these sorts of things, you get someone in the front of the room saying, "It is all you, whatever happens is because of your attitude or the thoughts you're beaming out to the universe, if they're negative, that's why you've been searching for a job for six months or two years."

This is amazing, that everybody sat there passively and took it in, but here it is right in front of me, the group leader saying, "No, don't talk about the market, don't talk about the economy, let's talk about you and what's wrong with you." So I could be conspiratorial about that, as we almost have a sizeable ideology machine coming from the self-help gurus, the authors of the business books, the life coaches and the career coaches saying, "You have only yourself to blame for your low wages, for your layoff, for anything else that's happened to you."

Brancaccio: And that can be very, very destructive. Because you tested the proposition yourself. You're extremely well-educated, one of the best writers on the planet, and when you removed a bit of your normal safety net and went in trying to make it work with your positive attitude, it wasn't so easy.

Ehrenreich: No, and I can think of lots of reasons why I, in particular, was not maybe the most attractive job prospect for a lot of these companies, but it wasn't just me. There were people younger, smarter, real people — not undercover journalists but real people — who'd been looking for white-collar jobs for years. They had started doing other kinds of thing like driving in car services to make a living, because they just couldn't get back into the white-collar world. It could happen to us, David. I mean, media is a very scary place to work. I've had a driver taking me to an airport, more than one case, and you talk to them a little bit and find out that he was a media executive until his layoff, or he was an engineer. Talk to your drivers, that's one very common occupation to go into for people who've lost their jobs.

Brancaccio: Heaven forbid you're not a spring chicken anymore, you find in the workplace....

Ehrenreich: Yeah, you're finished.

Brancaccio: Yes, you find in the workplace that low-wage employers are not so interested in, not necessarily at-retirement-aged workers, but even old-ish workers, people getting into their 50s, which I wouldn't call old-ish, but they have a hard time. This is someone who is mature, who has a worldview and some experience, but there's a bias against them.

Ehrenreich: I think it would be easier if you were over 50 to get a low-wage job than to get back into your field; say if you were a media executive or something, that's what it's going to be hard to get back into. There's an amazing amount of age discrimination. It will be rationalized as well: these workers may be more expensive, they might have more health insurance needs. But it is also the fear that the more mature person will have some views of their own and might be critical of the way things are done. The companies seem to want obedience. They seem to want the immature person who you can pay, squeeze a lot of hours out of and will not talk back.

Brancaccio: That's a tough one to change, that's a cultural thing. That's probably not something an act of Parliament or Congress can easily change. But it is just that in America, frankly, it is not seen as such a stigma for a company to get rid of experienced people. Downsizing is expected. So they don't retain people, and it thrusts people, folks who have lost their jobs, into this precarious situation.

Ehrenreich: Yes, but it seems to me — and I'm not a management consultant, though I may aim to be one someday — that it doesn't make sense to devalue experience, to cast away people who have experience. You get corporations where there's no corporate memory anymore because nobody remembers how things were done before. Everybody is starting all over. Morale is very low because people know that the guillotine awaits a couple of years down the road. They've seen the layoffs all around. I don't think we're doing business in a good way. There's way too much emphasis also on personality in hiring people and retaining people. I say, what about people who actually have the skills and experience to get the job done. Try that for a change. Because you can bet that in China and India right now, where we have rising competitive companies, that they're not basing everything on personality, and people conforming to the culture and not ever speaking out with new ideas.

Brancaccio: Whether you're charming or perky may not be the top thing on their list. Barbara, you and I are talking in August of 2006. That marks the 10th anniversary of Bill Clinton's end of welfare as we know it. You've been out there, seen first-hand what life is like after welfare reform. Are these low-wage jobs with few benefits still better than no jobs at all, but with government assistance?

Ehrenreich: It's hard to say. Welfare varied a lot from state to state in its benefits. In most cases, it was way too low and not something you could live on, even with food stamps and Medicaid. So the assumption behind welfare reform was that a job will be better than this. I don't think they were thinking what jobs paid in America. I know they weren't thinking about that. You have a Congress of people who, in very few cases, had ever worked for $6 or $7 an hour. They couldn't imagine what it was like to work for that amount. So the great success of so-called welfare reform is that there aren't many people on welfare anymore. The great failure is that there is rising poverty among single women and children, and that's because these jobs they've been pushed into don't pay enough, and of course you lose other benefits too, when you lose welfare.

Brancaccio: If you don't believe Barbara Ehrenreich, take a look at the statistics. For the most recent set of real wages that we have, which is from a year and a half ago, I think, it shows that on average, real wages, after you adjust for inflation, is going up only for the top 3 percent; for the rest of the world — 97 percent, 96 percent — real wages are flat or going down. Yet the average allows politicians to brag that the economy is doing the right thing.

Ehrenreich: Very good point. That top three percent is making well above even the $300,000 year level; I mean, where is that? It's way up there. So you're not talking about many people at all, but the incomes of this three percent are so vast and enormous they change the whole average, so it looks bright. I don't know when we have been so polarized; in terms of the class gap and how much it is growing. We're now the most polarized of the industrial nations. It is not a mystery why, one of the big reasons is that public policy for the last six years has been to cut taxes for the rich and cut services and programs that might have helped the poor and the working class, or the middle class, programs like Pell grants and scholarships and other things. So this is the outcome.

Brancaccio: What do you blame? Is it globalization? I mean, the Chinese, our trade competitors, are not going to pay much to those workers to make stuff, so the jobs go overseas. There's an inevitability to all of this; ultimately, wouldn't you say, that the forces that lead to people struggling the way they do in America, even though they are working hard or working full time, are beyond an American citizen's control.

Ehrenreich: Globalization certainly has a lot to do with some of it. But if you look at Roger Weisberg's film, Waging a Living, where he profiles four low-wage workers, none of them is in an industry that could be outsourced. There's a waitress, a certified nurse's assistant in a nursing home, another person doing hands-on service, and a security guard. You can't outsource the waitress to Mexico or your cheeseburger will be awfully cold when it gets to you. There's just no way to do that. We have already sent away the manufacturing jobs in this country. So the ones that are left, the sales and retail ones, are the ones that are very hard to outsource. Now, your employer may say, "Look, in the Sudan, they pay a nickel a day for this kind of work." But you can't take it away, so that excuse is gone now.

Brancaccio: But swirling in part of this, not each of the jobs you mentioned, but at some of them, is frankly the issue of immigration. Part of freer trade or open borders is that you do have people willing to work for a lower wage coming to this country, and you've experienced this in your journalistic work, the effects of immigration at that level.

Ehrenreich: When I was working on Nickel and Dimed I ran into some resentment of immigrant workers. More actually from supervisory people than people at my level. But most of the places where I was, it was native-born Americans making these low wages. In fact, about 72 percent of the people in these low-wage occupations in general are native-born Americans, they are not immigrant workers. But if you want to prevent immigrant workers from driving down wages you've just got to make sure that they're not exploited so much. When they can be hired at less than the minimum wage, and what has been typical of many completely — I would say — criminal employers is just not paying them at all; have immigrant workers do landscaping or something for two months and then say, "Oh, no, I've closed down, I can't pay you." That's the kind of thing that undercuts the native-born workers and everybody else.

Brancaccio: Addressing these issues about how so many Americans seem to be living their lives in this situation of near desperation, what are the things that politicians need to be saying to turn this into an even more powerful political issue, where its really on the tips of everybody's tongue? Do they have to understand the real state of the American economy before they can say those right things?

Ehrenreich: I think they have to understand that we have at least two economies here. You have an economy of the gross macroeconomic indicators, which are not bad in terms of growth and GDP. Well David, you know these things better than I do.

Brancaccio: I used to cover these issues.

Ehrenreich: But that does not have much to do with the lives of many, many Americans. As you said, when you have the top three percent of the wealthy change the average income numbers so much that things look good for everybody else, then you're just missing something with those averages and those gross indicators. So you've got to get beyond that. Now, I would assign our congresspeople to a certain amount of time at the minimum wage level, cleaning toilets and taking care of Alzheimer's patients and things like that, and it's better yet if they had done that in their real lives, and then let them look at these major economic issues.

Brancaccio: If one of the dominant features of America in 2006 is regular people assuming the risks that government and companies used to assume, it might be helpful if politicians understood that if — God forbid — a near relative got terribly sick, that money would come straight out of their paychecks, it wouldn't be covered by some sort of wonderful insurance plan that Congress probably assigns itself. Or if they understood that when there is a lean moment in the economy, their take-home wages could suddenly be curtailed, it might raise some consciousness over this issue.

Ehrenreich: Yes, and I think it would also just help if more of our elected officials would spend more time hanging out with ordinary constituents — poor, working class, middle class, whatever — and not just with wealthy donors. I think that is a very corrupting thing. I can understand the pressure on the elected officials to curry favor and kiss up to the wealthy but it is really corrupting and it alters their view of what is going on in America.

Brancaccio: I've noticed that just about every interview that I do on any subject, from the art world to income inequality in America, has an arrow that stretches back to campaign finance reform. And you're making this point, that both political parties have to raise money to buy the ads, to get elected, which is their goal; they can do nothing if they don't get elected. But the folks liable to have the means to write checks that get politicans elected live in the other economy.

Ehrenreich: Yes. I'm not an expert on campaign finance reform but yes, that seems to me like a no-brainer right there.

Brancaccio: Let's get back for a moment to that idea that there is a whole infrastructure built up that you have witnessed and studied, which caters to people who have fallen on harder times, who've fallen out of what they would have seen as their career trajectory, and now find themselves needing to make ends meet. You can pick up books on the subject, you can go to job fairs and seminars. The ones you write about in Bait and Switch often involve taking on even more risk for the individual.

Ehrenreich: I think there is an industry that is somewhat predatory toward the unemployed, especially the white-collar unemployed, who likely have somewhat more assets that than blue-collar unemployed. It's the career coaches and all kinds of other things. Once you start posting your resume on places like Monster.com, all this stuff comes into your inbox saying "We're an executive search firm. We can help you!" Some of those places are going to want thousands of dollars, and they might give you a desk and phone service for a while, but it is more money than you have. Career coaches want about $400 an hour to pump you up and help you perfect your resume and things like that. So, yeah, they're ready to pounce on you. I explored that world for my book Bait and Switch and currently advise people to think twice about how you spend any money that you have. This is probably not all that useful at all. Like the career coach who extensively analyzed my personality. They all want to analyze your personality.

Brancaccio: What did they come up with, Barbara?

Ehrenreich: Oh, it's embarrassing, David. I was kind of melancholy and an envious sort of person. You can see that, can't you? [Laughter]

Brancaccio: Not exactly. That's what you paid money for, huh?

Ehrenreich: But the worst part was he told me that based on his analysis of my personality tests I should avoid any occupation involving writing.

Brancaccio: [Laughter] The legendary writer/author of bestsellers should stay away from that writing stuff, that it's not your forté. Well, what does that tell you, that the advice wasn't as good as it should be.

Ehrenreich: And I wasted a lot of money to hear that.

Brancaccio: Did you talk about some of the jobs that are open to people who are finding themselves struggling after they fall off their original career path? These are often jobs involving commission, often stuff involving you as an individual having to set up the infrastructure for this job.

Ehrenreich: There's about 13 million Americans who are in direct sales work, which could be like Mary Kay. The one I got close to was AFLAC, the supplementary gap insurance. You've heard those AFLAC commercials, the annoying commercials with the duck. So they will tell you about the enormous amounts of money you could be making very quickly, but it turns out that you're taking all the risk. Both in Mary Kay and in AFLAC, I would have had to put up about $2,000 upfront to get a foot in the door. That's to buy the products in the case of Mary Kay, and for AFLAC, to get licensing. So you are taking this risk. They are taking absolutely no risk with you. You're not getting paid, you're not getting any kind of benefits, you only receive commissions. You don't have an office, except what you have in your home. So the millions of Americans who do this, their average pay is really awfully low. I forget the exact number, but it's $20,000 or less.

Brancaccio: Of course each of these companies will point to wonderful success stories within their ranks.

Ehrenreich: There are people who earn that Mary Kay pink Cadillac. There are people who do it. But by and large that's not a great option. Nor is franchising, another thing a lot of the laid-off white-collar or blue-collar people think about.

Brancaccio: I went to one of these jobs fairs, when I wrote a book a bunch of years ago, and that book had a chapter about this topic, and franchises. That was the thing that they were mainly hawking at the job fairs, a thing to change your life.

Ehrenreich: Yeah, and again, it sounds good, a ready made small business. But again, you are taking the risks, putting up the money. You have to buy the franchise, that's $15,000 to buy the franchise, and then it's a struggle as with any business, and you never know if your corporation is going to open up a similar one competing with you a few blocks away, whether i's a burger place or whatever else you've got.

Brancaccio: At this job fair, I saw my potential destiny if this journalism thing doesn't work out for me, which was one of these mobile cappuccino carts on wheels. This is what struck me. First of all I have this Italian last name, would make for a very fine, "Brancaccio's Cappuccino" kind of situation. But the other thing was, they showed me how for 16 cents or something, you could make a really big cappuccino that you could sell for $3.55.

Ehrenreich: Sixteen cents, wow.

Brancaccio: That's a pretty good profit margin. But again, the risk would be completely on my shoulders, which is the trend that you say is in modern America. There may be opportunities for people, we know people score in our society, and then they live in the other economy. But for the economy that is not so fun to live in, as you chronicle, there's loads of risk that no one else is ready to backstop.

Ehrenreich: This is something that Peter Gosselin has written about a lot in the L.A. Times.

Brancaccio: Yes, we've worked with Peter, he's a fabulous reporter.

Ehrenreich: Right, and he's talked about this shift of risk, that we once had more of an idea in this culture of sharing risk. That health insurance should include the whole pool, meaning the sick and the aged as well as the young and the healthy, not this cherry picking of just the healthy. That we should have pensions, not just your own 401K, leaving you at the mercy of the stock market or whatever. That idea has been eroding. It is more and more that you're on your own, that you face the world and whatever blows come your way on your own.

Brancaccio: If that were part of the social contract, you don't see it as much. There's the social contract that set up Social Security, all those decades ago, the idea that we just don't want our older people to be living in destitution. There should be something that catches them if that's the case. This notion that we all bear some responsibility for the situation of our neighbors seems to have been lost.

Ehrenreich: Yes, or put it in other language, we're losing a notion of the common good, the idea that there is community in America. That we are connected as people. That my neighbor's problem affects me, or that I am somehow involved with other people. That's been eroding for more of a mentality of, "hey, everybody's out for himself, just scramble on over the backs of the people who have fallen to get yours." So we have to rebuild that notion of the common good, which I think is not just about altruism or some kind of abstract thing. It's about feeling safe. It is about feeling secure, about feeling connected and good about each other. To me its very attractive.

Brancaccio: And at the same time, there's also an eroding of the simple idea that if you work really hard in America, ultimately good things happen. You're finding that that isn't necessarily the case.

Ehrenreich: No, and that's all I heard when I was growing up. Oh, work hard, work hard, work hard. I think I kind of believed it to a certain extent. But I don't think work pays anymore. It doesn't, it obviously doesn't pay enough for so many millions of Americans in low-wage jobs. I don't think that this "work hard get ahead" strategy works for the white-collar person who does work hard, does get ahead a little bit, and then gets slapped down by a layoff. That's a really basic thing, that's kind of the social contract, you put in your effort and you somehow will be taken care of. When you lose that, what's next? Well, I guess you get more and more cynicism. There's always complaints about the youth of our time, that the young, including African-American youths, are alienated and don't have proper mature values or something. Well, what if what's waiting for them is a fast food job, and you get to a point where you know it's not going to be much better than that?

Brancaccio: You have direct experience of that. You've worked at one of these jobs and you worked hard, you found childcare for your kids so you could do this job, and you had to dress a little bit better because of the work environment, and you find at the end of the month, you're actually down over not taking that kind of job.

Ehrenreich: It could be. It might be better to sponge off of other people as long as you can. Another thing people forget is that there are expenses to working. If you have a job, you have to get there, that's transportation; you have to be dressed for it, and that may simply mean a uniform, but you have to pay for your uniform; you have to launder your uniform all the time; and then what about childcare if you have small children you're leaving behind? It's expensive to work.

Brancaccio: Something I wanted to ask before we go, Barbara, is something you noticed. An absolute thing that would doom your candidacy for the jobs you were contemplating in your undercover journalism work is heaven forbid you mention that you had an academic background. Your advice is to never mention any connection to academia. Why is that?

Ehrenreich: Yes, I don't really have an academic background, because I never worked much in it. But while working on Bait and Switch I had put down teaching public relations on my resume, and I think that was a mistake. I put down teaching public relations. That was supposed to be my field, public relations, and in fact I've taught journalism, so I thought, close enough, right?

Brancaccio: Let's hope not, but I'll let that pass. [Laughter]

Ehrenreich: Only later did I realize that that could have been the kiss of death. Now, I have my own theory about this but I have no evidence. Do you want my theory?

Brancaccio: I want your theory.

Ehrenreich: My theory is that a lot of white-collar people feel that their college education was a waste. They hated it. They spent their time binge drinking or playing fantasy football games. They knew they just had to get their credential and get out. This turns into a lifelong hatred of anything to do with college other than those fun aspects like binge drinking.

Brancaccio: That's a terrible state of affairs if we don't actually honor the education that we see in others, and you're saying that once they think you are "over educated" you're doomed in an application.

Ehrenreich: Oh yes.

Brancaccio: Maybe they're just threatened.

Ehrenreich: I think they are. I think there's a high priority in the white-collar corporate world on maintaining the "comfort level" of the people who are already in the office. Let's not have anybody different. And look at the enormous conformity, corporate clothes, everything. You've got to be likeable, you've got to fit in, so that nobody wants anybody who might come along and rock the boat, have new ideas. Again, I think this is ultimately death to creativity, innovation and anything else that's going to keep American business running.

Brancaccio: Now you always knew that you were an undercover journalist and that you had things that you could fall back on if these experiments came to an end. But at what level did you take aboard — personally — this dread that the people in this other economy experienced, this notion of living the perpetually insecure life? At what point did it get to you?

Ehrenreich: From the outset I thought, and I said this in the book, I'm not going to experience the emotions of poverty because I know that I'm actually just working as a journalist in this situation. So I thought of it in Nickel and Dimed more as a scientific experiment. I felt quite detached. I found myself losing that detachment. It was less about the anxiety of starving to death, because I was not going to let myself starve to death. I'm not that good a journalist, I would have thrown up my hands. But more about the anxieties that go with doing a job, doing a job well, holding onto that job, those were my challenges. And in Bait and Switch I did, frankly, begin to feel a little rebuffed. Again, it wasn't my actual life, I wasn't suffering from the actual kind of depression that so many people who are unemployed in real life, laid-off in real life, experience. But it was: "Why am I not good enough? Why don't I even get a response to my applications?" Even a rejection would seem better than nothing, which is what I usually got.

Brancaccio: You mentioned depression. I see that in a lot of these statistics about people dropping out of the work force, people who had a view of what it was that they should be doing, who did it successfully for a while, but ran into a layoff. It is such a psychic shock, it is not laziness that makes people give up the ghost on this stuff. One wonders if it is actually some sort of traumatic stress kind of thing.

Ehrenreich: We know that layoffs are a big risk factor. Losing a job is a big risk factor for depression, drinking too much, and even suicide. It's way up there, close to divorce, as a disruption in your life that could have a lot of serious mental health consequences, which is one reason why it is so awful that so many people in that situation are told that it is their fault, whatever happens to them.

People would say to me when I was working on Bait and Switch, "I'm losing the will to go on." I've had somebody who wrote a piece for my website, barbaraehrenreich.com, about giving up: "Once I was perky, once I was ambitious, and I've just been cut down too many times." A white-collar person. So you've got to listen to that.

Brancaccio: Then you have others who go on. For instance in the film Waging a Living, we see people knocking themselves out, but managing to go on. And it is really admirable. People who are able to still find the will to put in those hours and keep looking for new opportunities. It is somewhat inspirational.

Ehrenreich: I think most people are amazingly resilient and that in their situation I would be pouting all the time. [Laughter] Yet they do somehow manage to keep going. I have great admiration for that, but I think it is more than I could expect from myself.

Brancaccio: You've been examining these issues of life in the other economy for quite a few years. You've talked about a growing movement toward promoting a so-called living wage. Are we close to a turning point on this, in which there will be a critical mass that will bring forward significant change? I'm not talking about a couple of extra dollars added to that minimum wage, which would be significant to many people, but forming this sort of critical mass for change. Or is that something that is still elusive?

Ehrenreich: Well, I won't make a prediction, I will just say it depends on what we do. It depends on how many people are willing to make this a significant part of their effort, their lives. Yes, I think we could turn around economic priorities in this country. I think it wouldn't be that difficult if there was enough will, if there was enough of a grass roots movement to do it. Otherwise there's no stopping the upward flow of wealth. That's just been the pattern for more than six years really. And where did that take us? We are already about as polarized in wealth as many third world countries. It's not a happy prospect. It's not healthy for a democracy to be a country increasingly divided between the trailer parks and the tenements on the one hand, and the gated communities on the other. But that's where we're going unless we say no, that this has got to turn around.

Brancaccio: So you're not sure it is about to happen, but you are saying there is a capacity for change if people really focus on it.

Ehrenreich: Yes. It's not like predicting the weather or something. It's really that we're part of this. Are we going to make this happen or not?

Brancaccio: Part of that sounds like it requires the realization that policy is partly at fault here. This is not about lazy people without the gumption necessary to succeed. It is about structural things that humankind has built into policy, not a law of physics where this has to be the way things are.

Ehrenreich: No, there's no sociological or economic law that says that poverty has to be, that there's always a lot of poor people, or there has to be a great division between the rich and the poor. These are the results of conscious social policies. We've got the results of conscious policies, we can turn it around.

Brancaccio: Barbara Ehrenreich, I want to thank you for this conversation. I've learned a lot and I hope that the people who have listened in with their little headphones have also been sensitized to something that — if they don't feel it in their daily lives and are lucky enough to live in the stronger part of the economy — they get a better sense of. Thanks.

Ehrenreich: Thank you.

Barbara Ehrenreich is the author of thirteen books, including the New York Times bestseller Nickel and Dimed. She is a frequent contributor to the New York Times,Harpers and the Progressive. She is a contributing writer to Time magazine.

NOW: Risky Business
David Brancaccio and Los Angeles Times national economics correspondent Peter Gosselin analyzes a thirty-year pattern of cuts to benefits and worker protections that has shifted financial risks from government and business onto average Americans. (April 8, 2005)

Talk About This

Waging a Living: Conversation with Barbara Ehrenreich

NOW's David Brancaccio hosts a special conversation with Barbara Ehrenreich on the state of American workers and wages today.